Why Cisco Systems (CSCO) Stock is a Compelling Investment Case

If you are looking for the best ideas for your portfolio you may want to consider some of Mott Capital’s top stock picks. Mott Capital, an investment management firm, is bullish on Cisco Systems Inc. (NASDAQ:CSCO) stock. In its Q4 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Cisco Systems Inc. (NASDAQ:CSCO) stock. Cisco Systems Inc. (NASDAQ:CSCO) is a technology company based in California. The stock is down 5.3% since the Mott Capital’s pitch in January 2020. On a year-to-date basis, Cisco Systems Inc. (NASDAQ:CSCO) stock has fallen by 3.9%.

On January 23, 2020, Mott Capital had released its Q4 2019 Investor Letter. Mott Capital said that Cisco Systems Inc. (NASDAQ:CSCO) stock rose 5% in the fourth quarter. The investment firm said that the company could benefit from the deployment of 5G wireless network.

In 2019, the Mott Capital Thematic Growth Composite recorded a return of 35.85% (net of fees) as compared to 31.45% of the S&P 500 Index (total return).

Let’s take a look at comments made by Mott Capital about Cisco Systems Inc. (NASDAQ:CSCO) in the letter.

“Cisco (CSCO) fell in the fourth quarter by almost 5% and was the only stock in the portfolio down for the year, declining by 4%. The stock was added to the portfolio in early 2019, and I still believe it is well-positioned to be a player in 5G wireless equipment down the road. Cisco was hit hard by the trade war between the US and China, and I hope it can recover now that the trade war appears to be easing. At this point, I see no reason to make a change.”

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In Q1 2020, the number of bullish hedge fund positions on Cisco Systems Inc. (NASDAQ:CSCO) stock decreased by about 15% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Cisco’s growth potential. Our calculations showed that Cisco Systems Inc. (NASDAQ:CSCO) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.